For key words to do their job, children must be able to separate the first sound in the word from the rest of the word (e.g., to separate the /b/ from the /all/ in ball). Ideally, children develop this skill, called initial phoneme segmentation, during or before the prekindergarten year. However, not all children meet this expectation. Fortunately, you can work on this skill while teaching the alphabet, including alphabet key words. Research strongly suggests that phonemic awareness (conscious awareness of the individual sounds in spoken words—for example, recognizing that sheep has three sounds: /sh/, /ee/, and /p/), although an entirely oral skill, is actually best developed with accompanying letters. This initial phoneme segmentation issue is also why you should be judicious about using alphabet key words that begin with blends (two consonant letters pronounced in succession in a syllable, such as dr in drum); it is especially difficult for young children to separate the initial phoneme in a blend.
Dig right into phonics books to give him a head start in reading comprehension. Many phonics programs include books that are written specifically for beginning readers. Sit down for some one-on-one time to tackle letter sounds and sight words. You can make reading fun for him, which will make him look forward to sitting down with a good book in the future.